Work

Nonconvexities, Retirement, and the Elasticity of Labor Supply

Year: 2013

Type: article

Abstract: We consider two life cycle models of labor supply that use nonconvexities to generate retirement. In each case we derive a link between hours worked prior to retirement, the intertemporal elasticity of substitution for labor (IES), and the size of the nonconvexities. This link is robust to allowing for credit constraints and human capital accumulation by younger workers and suggests values for the IES that are .75 or higher. (JEL D91, J22, J24, J26)

Source: American Economic Review

DOI: 10.1257/aer.103.4.1445

Authors: Richard Rogerson, Johanna Wallenius

Institutions: Princeton University, Stockholm School of Economics

Language: English

Topic: Retirement, Disability, and Employment

Subfield: Demography

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2049809759